By Amy Calfee

The cash-poor business: day 1

Everyone has gone home for the day and here you are scanning the accounts receivables report. You can’t believe what you’re seeing—so many customers are past due. How can you get them back on track to pay on time and in full?

You thought you were limiting your risk by accepting credit cards and only issuing credit to people. It looks like your payment terms are “net later.” Sure, it’s a tough economy and it’s going to get tougher if you don’t take action. You hate calling people asking for money, especially since you’ve already earned it.

Maybe you need to just get organized and implement new policies and procedures. Yep, that’s it. Start cracking the whip, dig yourself out of this hole and pull yourself up by the bootstraps! (There, just what you needed—a pep talk.) Ugh. You’d rather be doing anything else than chasing people for money. There’s got to be a smarter way to stabilize cash flow!

Small business debt dilemma

If you can relate to this scenario, you’re not alone. According to a recent online survey of business owners by the web-based legal service Rocket Lawyer, 49% of respondents wrote off bad debt last year. With 43% reporting accounts older than 90 days, these companies were on track to repeat the same performance.

While over half use legal contracts for protection, only 34% and 30% call late paying customers and send formal demand letters, respectively.

“Business owners struggle with the time and skills it takes to effectively manage collection activities. It’s also very personal. How do they get paid when their customers are suffering from job loss, house loss and the rising prices of everything,” said Michelle Dunn, credit and collections expert.

“Something to remember when you are lenient with customers who are past due: If they owe you money, they probably owe others money and whoever takes action first, gets paid first.”

Dunn, who has owned and managed a debt collection agency, teaches others how to collect debt and provides insights for business owners through her websites, speaking engagements, books and webinars (www.MichelleDunn.com or www.Credit-and-Collections.com), says that when it comes to debt collection, “You have to do it! If you don’t want to do it or aren’t confident about how to collect a debt, hire a qualified agency to do it for you.”

Irv Pollan, vice president of Jacksonville-based NCC Business Services of America Inc. (NCC, www. NCCBusiness.com) says, “Before contacting us, past-due accounts must be thoroughly documented to prove the customer actually owes the debt. We then take the appropriate steps to locate and make contact to negotiate a payment.”

“While a demand letter may seem like a simple thing, all debt collection activities must follow the letter of the law, ” he continues. NCC, a third-party debt collection agency founded in 1986, offers small businesses low-cost and time saving demand letter programs in addition to contingent fee-based services.

Being in debt and collecting debt is not easy. “We train our team to work effectively and monitor their performance,” Pollan says. “At the same time, we understand the overwhelming circumstances many people face and are in a unique position to help them get out and stay out of debt.”

What you can do day 2

Try following Dunn’s “it must be done” advice. If not you, then assign these activities to an employee.

•Call anyone with a balance over 60 days. Make sure everything is OK, ask what you can do to help them pay the bills on time and get a payment promise today.

•Send a letter following up on your call — mail it immediately! It can be short and sweet, but must be very specific. Make sure to mention how much will be paid and by what date.

•Follow up! If you get a machine, call again and send a letter.

The next 28 days

Remember that pep talk to get organized with new policies and procedures? Here are some steps to get you started.

1. Print out or buy credit applications. (See www.michelledunn.com/free.html for an example.)
2. Put them on a clipboard at the front desk and on your website.
3. Have every new customer fill one out.
4. Mail one to every existing customer with a stamped, addressed envelope.
5. Check all references on any completed applications.
6. Set firm credit limits.
7. Set terms for every customer and print them on all invoices and statements.
8. Research debt collection laws.

Differentiate differences

Remember that while the economy is struggling, so are your customers—many of whom have never had a problem paying their bills. Differentiate between customers who’ve always paid on time and are now having a problem and those who regularly pay late.

Taking any or all of these steps will only help you to collect money in the short term. Without making changes, such as having a credit policy, conducting credit checks or retaining a debt collection agency, you’ll be right back where you started next month.

You have arrived!

Hooray! You have reached day 31 and now have fewer accounts that are past due and you have the systems and relationships in place to effectively manage your accounts receivables moving forward. Much better!

Amy Calfee is the Chief Listening Officer (CLO) for Temerity Creative LLC. She can be reached at 904-733-3511.

17 tips to getting paid

1. Require payment at the time of service.
2. Invoice customers on a regular basis and as soon as the work is completed.
3. Make sure the due date is clearly visible on invoices.
4. Change your payment terms. If your terms are net 60 or net 45, change them to net 30 or net 15.
5. Offer an early payment discount to anyone who pays early, such as 1% or 2% off the bill for payment within 10 days.
6. Act early. When an account reaches 30 days, take action.
7. Call big accounts or accounts with large balances 10 days before the invoice is due to make sure they have the invoice, the correct address to send payment and that the invoice is scheduled to be paid.
8. Be as flexible as you can with payment plans.
9. When setting up payment plans remember that you want as much as you can get as frequently as you can get it.
10. Be picky about new customers.
11. Have a strong contract.
12. Run weekly accounts receivable reports and follow up with any accounts that are past due or becoming past due.
13. Don’t extend credit blindly.
14. If a business owes you money, visit them. If it’s a restaurant, go there for lunch. If it’s a printing company, get something printed or copied. Every time you walk in they will see you and it reminds them that they owe you money.
15. Direct the account’s salesperson to collect the money or withhold their commission until the bill is paid.
16. Reduce minimum orders. You could possibly get more orders for less money paid up front.
17. Use a collection agency.

By Ryan Skubis

If your company is like most, your new-employee orientation consists of a tour of the office and a few sessions on company policies and procedures. Even then, you may be ahead of the game. In a recent Accountemps survey, 34% of HR managers interviewed said their companies don’t even have a formal new-employee orientation program.

But, as the saying goes, you never have a second chance to make a first impression, and investing just a bit more time and resources on orientation and onboarding can pay off in a big way.

Orientation opportunity

New-employee orientation provides an ideal opportunity to give workers the tools they need to perform their jobs well — and to instill in them your company’s values and goals.

In fact, a strong new-employee orientation can spell the difference between a smooth transition into a new position or a rocky start on the job. In the same Accountemps survey, 35% of HR managers who indicated their companies did have orientation programs said the greatest benefit was employees’ stronger understanding of company values, guidelines and expectations.

Another 20% felt a formal orientation helps employees make positive contributions more quickly, and 19% noted that employees who go through orientation feel a more rapid connection to the company.

Tips for a good start

Any one of these benefits alone would provide a good argument for building a robust employee orientation program. Want to make yours more effective? Start with these tips:

Provide a warm welcome. Start making it a positive experience from the very beginning. Alert security that a new employee will be arriving, and make sure someone from your team (ideally, you) meets him at the front door and escorts him to his desk.

Ensure that his work area is set up and that he has the tools he needs to get started, including access to the company intranet and databases, if necessary. If you aren’t able to meet him at the door, stop by as soon as possible to tell him how happy you are that he’s joined the team and to let him know what he’ll be doing for the next few days. Make sure he feels valued and motivated from the very start.

Review the lay of the land. Introduce the newcomer personally to all of her coworkers and key contacts from other departments, and explain any policies and procedures specific to the department. If you have one, ask an HR representative to go over compensation, benefits, and company policies with her.

A tour of the facilities, including rest rooms and break areas, as well as how to set up voicemail, are also important: She’ll feel more at ease and ready to jump right in to the job if she’s not worrying about the little things.

Go over the basics of the job. Sit down with your new employee on his first day and make sure he understands his main job duties and how his work will contribute to departmental and company priorities. This is the time to elaborate on elements you reviewed during the recruitment process.

Go over the job description point by point, and highlight performance goals. Paint a detailed picture of what he can expect in the first few months on the job.

Provide an overview of the company. A savvy job candidate approaches an interview armed with knowledge of the company. Now fill in the gaps by explaining more about company operations, including all products and services.

Provide a short history of the organization, and discuss how it fits into its industry. And talk a bit about the office culture. All of these things will give the new employee a sense of how she can best fit in and begin contributing immediately.

Keep it lively. When orientation consists of dull slide presentations and piles of paperwork, no one wins — the employee is bored and doesn’t learn the things she needs to know, and the employer wastes the opportunity to inform the worker about what’s important.

Try different techniques — videos, games, group discussions, guest speakers — to keep things interesting and useful. That way, the employee is more likely to stay engaged and absorb pertinent information. If you are holding an orientation for multiple employees, consider bringing someone in from senior management to speak about the company’s mission and values; it will lend more credibility and importance to the entire process.

Space it out. Avoid overwhelming new workers with too much information at once. Instead, consider using a broader onboarding approach by spreading orientation over a few weeks, or even months. Hold some informal discussions on the first few days, and then follow up with a more formal program.

Continue to check in frequently with your new employee, perhaps once a week, to see how things are going, answer any questions, and provide feedback on her work.

Provide a point person for the future. If you have more tenured staff who are willing to help out, consider assigning new employees mentors who can provide more detailed guidance and advice as the weeks go by. Not only will this give new workers an additional go-to person for questions and concerns, but it also might give them a friend and confidant who can help them feel like a real part of the team as they settle into their new jobs.

It’s normal for new employees to be a bit uneasy in the early days on the job. But you can help ease their anxieties with a well-thought-out orientation process. What’s more, you’ll benefit from it, too, as these workers are better able to hit the ground running.

Ryan Skubis is the district president for Accountemps in Jacksonville. Accountemps is the world’s first and largest specialized staffing service for temporary accounting, finance and bookkeeping professionals. Accountemps has more than 350 offices worldwide and offers online job search services at www.accountemps.com.

By Giselle Carson, Esq.

As a result of our tight labor market and the entrepreneurial spirit of many foreign nationals, we are seeing an increase in the usage of E visas granted to skilled and talented foreign entrepreneurs to come and work in the U.S.

This article will focus on the E‐2 Visa which is most commonly used.

The advantages of the E‐2 Visa

The E‐2 Visa is particularly advantageous for foreign business owners, managers and essential skilled employees to remain in the U.S. for extended periods of time in furtherance of their investment. E‐2 Visa renewals are, potentially, indefinite as long as the business continues to generate enough income to support more than the investor and his/her family.

It is also one of the best alternatives for a foreign national who has exhausted the allowed time in an H and/or L status. It can be used by non‐degree workers and for self‐petitioning. Additionally, the spouse of the E investor can apply to obtain work authorization

Who can obtain an E‐2 Visa?

A national of a foreign country in which the U.S. maintains an appropriate treaty of commerce and navigation, and who is coming to the U.S. to develop and direct the operations of an enterprise in which the national or the petitioning company has invested, or is actively in the process of investing a substantial amount of capital.

The investor may start, or buy an existing business. Oftentimes, it is best for the applicant to buy an existing business. This status is not designed for retirees or employees of nonprofit organizations.

What are the challenges of the E‐2 Visa application?

The increased scrutiny and inconsistencies of adjudications by the consular posts around the world coupled with the irrevocable expenses incurred by the client can cause much stress to the applicant and his/her family. A thorough and organized filing can make visa processing less stressful and oftentimes expedite an approval.

The first step in E‐2 Visa planning

The U.S. must have the requisite treaty with the applicant’s country of citizenship. Without the existence of the applicable treaty, no E‐2 visa application is possible. A list of the treaty countries which support E visa applications can be found in the Foreign Affairs Manual (FAM)¹ and at the Department of State website².

The individual investor or employee and the E business must have the nationality of the same treaty country. A person’s nationality is determined by the authorities of the country in which the person claims nationality.

The business’ nationality is determined by the nationality of the majority owners of the business. When the treaty business is at least fifty percent owned by nationals of the same treaty country, the nationality requirement is satisfied.

What additional requirements are needed to obtain a Treaty Investor (E‐2) Visa?

An E‐2 Visa applicant must also show that:

•He/She has invested or is actively in the process of investing funds which are at risk, or subject to loss, if the business fails.

•The enterprise is real and operational. Speculative or idle investments do not qualify.

•The investment is substantial and proportional to the cost of the enterprise.

•The investment generates sufficient income to provide a living for more than the investor and his/her family.

•The investor is coming to the U.S. to develop and direct the enterprise.

•If the applicant is not the principal investor, he/she must be employed in a supervisory, executive or highly specialized skills capacity.

•The applicant intends to depart the U.S. when the E status terminates.

How can the applicant show that he has invested irrevocably committed funds?

One of the most taxing requirements for the E visa applicant is that the investment capital must be subject to partial or total loss, if the investment is not successful. To show funds commitment, the investor should present statements verifying the purchase of items committed to the business and also that a portion of the required funds are being held in escrow pending visa approval.

What is a substantial investment?

There is no bright‐line minimum investment that qualifies as substantial. The applicant must show an investment sufficient to indicate the investor’s financial commitment to the enterprise and to support the successful development of the business.

For example, the guidelines provide that an investment of 100% or a higher of the cost of the business would typically qualify for a business that costs $100,000 or less. Conversely, an investment of $10 million in a business that costs $100 million would likely qualify as a substantial investment.

What is required to show that the investment is not marginal?

Meeting the marginality requirement is highly dependant on showing that the business can create and support jobs for U.S. workers. A marginal enterprise is one that does not have the present or future capacity to generate more than enough income to provide for minimal living for the investor and his/her family.

An investor cannot show independent sources of income to support his/her family to show that the business is not marginal. Although not as persuasive as creating direct jobs for U.S. workers, the applicant should indicate that the business will also create and support indirect job expansion, as it will provide commerce for other local businesses such as printers, couriers, banks, utility companies, etc.

What is the length of stay of an E visa holder and how long does the process take?

An E visa is typically issued for five years; however the I‐94, providing the length of stay allowed in the U.S., is given for two years at a time. Be prepared for an E‐2 Visa Application to take a several months. The length and the complexity of the adjudication vary from consulate to consulate.

What status can the spouse and children of the investor obtain?

The spouse and unmarried children under the age of 21 of the visa applicant, regardless of their nationality, can apply to obtain E status. A significant benefit of the E visa is that the spouse of the principal E visa holder is able to seek employment authorization from the DHS.

Where to apply for an E Visa?

This is a strategic decision that should be made with the guidance of an immigration attorney with experience in E visas. The application can be made in the U.S. or at the consular post after a full analysis of the facts of the case and the requirements of the applicable consular post.

Consular processing tips

When preparing the consulate application, it is critical to check the consulate’s website on a regular basis. Each consulate has specific requirements and filing procedures and formats that must be followed which change on a regular basis without notice. There are more than 75 U.S. embassies and consulates around the world, each with its own particular requirements.

What are the main reasons for a denial or requests for additional evidence?

•Presenting a disorganized and incomplete case. Officers tell us that the majority of these cases are submitted by applicants without an immigration attorney, to save money, but at the end it costs more and it may lead to a case denial.

•Failure of the applicant to be prepared for the interview;

•Failure to overcome the marginality threshold;

•Failure to complete the DS‐160 application accurately; and

•Failure to submit supporting documents for dependants.

What if the application is denied?

The best defense to avoid a denial is preparing the best possible application. In the case of a consular application for an E visa, in addition to a strong application, the client must be well prepared for the interview.

If the application is strong and maybe the denial is the result of an adjudication error or misunderstanding, the attorney should prepare a strong rebuttal legal brief with supporting evidence to submit to the interviewing officer for reconsideration as soon as possible.

How can an E‐2 Visa holder obtain legal permanent resident status?

The E‐2 visa is a nonimmigrant visa whereby the investor must have intent to return to his/her home country once the business obligations have concluded. Not surprisingly, after living and working in the U.S. and spending significant time, money and effort in running successful businesses many foreign nationals want to stay in the U.S. However, there is no clear path from E status to apply for legal permanent residency.

Potential immigrant options include:

•Employment‐based sponsorship: U.S. businesses may sponsor the foreign national or his/her spouse for a legal permanent residency.

•Family‐based sponsorship: the E visa holder marries a U.S. citizen or lawful permanent resident or has other immediate relatives (parent, sibling, or child) who can provide sponsorship.

•EB‐5 Immigrant Investors Visa

The E visa involves detailed planning and preparation. But, despite its challenges, with the right guidance, it can be a very effective option for foreign nationals to live and work in the U.S. and at the same time create jobs and strengthen our economy.

Giselle Carson, Esq., is an immigration and business attorney and shareholder at Marks Gray, P.A. She can be reached through www.marksgray.com.

References

¹ 9 FAM 41.51, Exhibit 1.

² http://travel.state.gov/visa

Anyone who has been to THE PLAYERS Championship knows that the greatest tournament in golf is about more than the game itself. The annual tournament is a social mecca, a haven for new business development and the must-attend venue for executives of all levels.

THE PLAYERS is the place where businesses meet, new relationships are formed and deals are made. Each year, more than 350 corporate businesses invest in a range of hospitality and sponsorship programs at THE PLAYERS — all with a goal to build relationships and generate new business. But the question is often asked, “What is available for small business owners?”

What’s in it for me?

“There is no better event in Northeast Florida to meet influential business professionals and decision makers than at THE PLAYERS,” said Jared Rice, director of sales and marketing for THE PLAYERS. “But there is a misnomer out there that small businesses cannot get into these big hospitality tents.

“We want local businesses to have the opportunity to network with C-level executives from around the world and have created customized packages just for that purpose. We have thoughtfully designed tickets and venues that allow businesses of every size and type to attend the tournament and network with local, national and international executives who attend the tournament not only to watch the game, but to make deals and meet new contacts,” continues Rice.

Vince McCormack, president of locally based Perdue Office Interiors, is one small business owner who understands the value of networking at THE PLAYERS. For the past 20 years, McCormack has taken advantage of the opportunities afforded to small businesses by purchasing packages ranging from private chalets to The Benefactor packages.

This year, McCormack has already purchased a customized package for The Benefactor tent that includes 16 tickets per day, Monday through Sunday, for his sales team to utilize for business development and client entertainment.

“We often entertain clients at local events, such as the Jaguars’ games and the Gator Bowl, but THE PLAYERS is unique in that it is an international event right here in our backyard that draws business professionals from around the world,” said McCormack. “The tournament has always been a great value for our company — customers appreciate it and we are able to develop new relationships and enhance existing ones.”

Like McCormack, Andy Baggs is another local business owner that understands the value of business development at THE PLAYERS. Every year, The Baggs Craft Dixon Powell Group at Morgan Stanley Smith Barney purchases corporate hospitality packages to network with other business owners and generate business leads at the tournament.

“THE PLAYERS is the place to be for that one week in May and it is a great opportunity to network; odds are when you are out there you will run into people you know and be introduced to new business professionals,” said Baggs, first vice president, wealth advisor and investment management consultant with the financial group. Baggs is also a fourth-year vice chairman with THE PLAYERS.

For this year’s tournament, Baggs and his group purchased The Benefactor package, which includes 30 tickets per day to the venue, and divvied up the tickets amongst their team and other advisory groups. Baggs said this is the best way for small businesses like his to have access to corporate hospitality tents without spending outside their budgets. The tickets are used to entertain clients throughout the week, or in some cases, Baggs and his team will give the tickets to clients to use at their convenience.

“We get more mileage from The Benefactor package because we are able to take a small group of clients to the tournament each day and this fits well within our business model,” Baggs said. “I think THE PLAYERS has done a tremendous job of creating customized packages for small business owners who may have different needs and uses for the tournament than a Fortune 500 company.”

Be a part of the action

The key for small businesses to take advantage of the networking opportunities at THE PLAYERS is to find a plan that works for them. Here is a list of options for small businesses to attend the tournament and network at Northeast Florida’s largest business and sporting event:

•Decide which package or ticket is the best fit for your company. Small business owners and executives can purchase weekly and individual tickets to hospitality venues and make a plan to take one or two clients to the tournament each day.

•Work with THE PLAYERS sales and marketing team to discuss a custom package that fits your budget and entertainment style.

•Determine which clients, prospects or former clients you would like to invite to the tournament. Call and invite them to attend on a particular day or send an invitation.

•Make a list of other businesses and executives you want to meet at the tournament. Make it a priority to network at venues such as The Turn, The Benefactor, The Courtyard and The Clubhouse to meet new business contacts.

•Partner up with another small business to purchase a private tent or customized package to entertain your clients, prospects and employees. There are several private venues and packages that can be shared by companies that pool their funds together and divvy up the tickets.

Giving back

There is no doubt that THE PLAYERS is an economic engine for Northeast Florida and its small businesses. The tournament brings an economic impact of more than $150 million to the First Coast, which is the equivalent to having the Super Bowl in Northeast Florida every year.

Small businesses in Northeast Florida have the opportunity to take advantage of the tournament and create lasting relationships that will ultimately affect their bottom line. By investing their time and resources, small businesses can be a part of the action and increase their recognition, relationships and revenue by utilizing the networking opportunities available at THE PLAYERS.

2012 Fan Course Map of THE PLAYERS 

THE PLAYERS Championship 2012 – What You Need to Know

When: May 7-13, 2012

Where: TPC Sawgrass, Ponte Vedra Beach

Tickets: Children 18 and younger are admitted free with a ticketed adult. Tickets can be purchased at Publix or online at www.pgatour.com/theplayers.

Corporate Hospitality: Corporate hospitality packages are still available. Visit www.pgatour.com/theplayers and click on 2012 Tickets or Hospitality.

 Parking: All parking is onsite at THE PLAYERS Championship. General parking Monday through Wednesday is free. Parking passes Thursday through Sunday must be purchased prior to arriving at the tournament. Passes are $20 and can be purchased online at www.pgatour.com/theplayers, at Publix or at Will Call the day of the tournament.

Cell Phones: Cell phones are allowed at the tournament and THE PLAYERS will have upgraded towers for additional coverage and service.

 THE PLAYERS by the Numbers

$150 million: Estimated economic impact to Northeast Florida

350: Corporate businesses that invest in a range of hospitality and sponsorship programs at THE PLAYERS.

135,000: Approximate number of fans, business executives and media who attend THE PLAYERS each year

$50 million: THE PLAYERS goal over the next 10 years for local youth-related charities

$46 million: Generated for Northeast Florida charities since 1977

$5.9 million: Raised for local charities in 2011

20,000: Military tickets distributed for 2011 tournament

2,000: Volunteers who make THE PLAYERS possible every year

865: Media staff members representing 192 outlets and 12 countries covering THE PLAYERS

700 million: Households worldwide that receive THE PLAYERS telecast each year

38.4 million: Viewers who tuned into Golf Channel and NBC to watch the 2011 telecast

By Nathaniel Herring

Nationally, economic indicators across the board suggest a rebound, however gradual, from the recent downturn—and businesses in all industries are taking note. The Jacksonville climate, in particular, continues to slowly brighten: The metro area added 5,500 private sector jobs last year, landing the area in the top 50 U.S. markets for job growth.

As the recovery continues to take hold, many business owners are considering more aggressive expansion strategies—and lending to small and mid-market companies is on the upswing.

Yet while banks are more actively lending, some business owners are hesitant to face credit standards and the underwriting processes. Companies looking to ramp up production, invest in new product development, hire more people, and otherwise march toward greater growth and profitability shouldn’t let this stop them—but they should plan on doing some work before going to a lender.

If you are planning to seek new capital through a business loan, consider the following tips:

Take a team approach

No matter where your company is in its business cycle, it’s crucial to maintain frequent and open communication with a team of professionals: your accountant, investment adviser, banker and other professionals. A balanced dialogue—that includes advisers who are well-informed about the market landscape and your business—is critical to helping you effectively shape the direction your company takes.

Your banker can serve as an insightful business adviser. Maintaining open and ongoing communication will help you take advantage of near- and long-term growth opportunities, as well as effectively weather downturns. When you sit down with your banker, be prepared to discuss not just your borrowing needs, but your overall business situation as well.

Plan ahead

Too many small and mid-sized companies focus on landing a large account without considering the end game: meeting needs, without going under. Put simply, businesses can’t afford to commit to a significant new project without securing the capital necessary to complete the job.

A forward-looking approach is essential in financial planning; if possible, forecast six to 12 months out for anything that can make a material change or put stress on working capital. Don’t wait until you have the purchase order in-hand before getting your bank involved.

Prepare a persuasive presentation

Present a clear view of your financials. To show that your company is financially sound and capable of taking on new endeavors, support your claims with detailed income statements and balance sheets, as well as at least three years of income projections.

In short, “Sales are up!” or “Talk to my accountant,” simply won’t cut it. While enthusiasm and confidence do count, you must articulate the specific value you expect from a new infusion of capital and demonstrate your ability to repay the note.

Another tip: Tell a compelling “story.” Give the financials context and dimension by providing background. What makes your business viable? How are you unique? What obstacles have you overcome? How do you stack up against the competition? If you’re meeting with a bank for the first time, consider rounding out your story with the following details:

•Company history

•Company accreditations, credentials, awards, recognitions

•Management team bios

•Product and services overview

•Marketing analysis and strategy

•Relevant operational and production plans

•Risk evaluations

Avoid common pitfalls

Many mistakes are easy to sidestep. Here are a few tips:

Get current valuations. Many business owners overstate the value of their collateral. Even though the bank will obtain an independent appraisal, it’s important that you have a solid understanding of your assets, including land, buildings and equipment.

Use setbacks to your advantage. Banks recognize that all businesses go through ups and downs, especially in a challenging market. Rather than downplay losses, discuss how you minimized the impact and what strategies you have in place to mitigate future issues.

Time it right. Banks underwrite based on a full year of financial reports, so consider this: Would your case for financing be stronger six months from now?

Be flexible. More stringent risk management policies in banking may mean your entire borrowing needs can’t be met with a single, lump-sum loan. Be open to exploring other options, such as an incremental financing program. Success with smaller infusions of capital over time can help increase your business’s credit-worthiness while assisting with cash flow.

Also, be sure to discuss all available funding options, including government initiatives like Florida’s Economic Gardening Institute—a program to support the growth of second-stage businesses—and SBA (U.S. Small Business Administration) guaranteed loans, with your banker.

Is it time for your business to take advantage of more favorable interest rates and improved lending terms to secure new capital? From gains in national consumer confidence to a two percent drop in Florida’s unemployment rate last year, signs of economic recovery are encouraging companies to explore opportunities for growth.

Before you decide to initiate expansion plans or take on that new, large project, make sure you have a banker on your team and your financing plans secured.

Nathaniel Herring is the city president of Fifth Third Bank (North Florida) and oversees the bank’s operations in the Jacksonville market. He is a Jacksonville native and has more than 19 years’ experience in the banking industry. He can be reached at 904-486-1927 or Nathaniel.Herring@53.com. For more information about Fifth Third Bank offers, visit www.53.com.

By John Featherstone

Have you ever hired the wrong person? Most managers will have to answer “yes.” Hiring the right person the first time can save you tens of thousands of dollars in time and resources. And it’s not as difficult as you might think.

People are a company’s most valuable asset, so the company will only be as successful as the quality of the people it hires, trains and leads. Identifying what you need for the most success in a position, and then knowing how to find it in a candidate, is critical.

Improve your process

Step 1. Clearly identify the “musts” needed for a position, and then weight each criterion. These are things that candidates must have in order to be called for a phone interview. Beyond basic skills, managers need to give serious thought to special skills the employee will need to solve current problems and achieve performance improvements.

Step 2. Look for and rate those “musts” during the initial resume review and all interviews (phone and in-person). Ignore your “gut feeling”—whether positive or negative—until all candidates are interviewed and evaluated against the same criteria.

Step 3. People succeed from their strengths, so keep your focus there during the interview. Just be sure there are no weaknesses that would almost surely lead to failure on the job.

Step 4. The in-depth interview is a fact-gathering session that allows you to make a good hiring decision. Spend your time gathering facts directly related to job performance. Don’t do all the talking. Candidates should be able to share tangible results that are directly relatable to the position for which they are applying.

Step 5. Commit to taking time for a successful recruiting project. Take no shortcuts. Doing the job properly the first time will save you time, money, energy, frustration (yours and the employee’s co-workers) and the need to do this all over again too soon.

Too many managers hire based on their “gut feelings” or on interviews in which the hiring manager has talked more than the candidate for hire. Seldom does one learn anything while talking. The purpose of the interview is to gather job-related facts. This requires that the candidate talk about 80% of the time.

Areas of assessment

There are areas of assessment in which intensive questioning is needed to clearly identify the best people to hire. Here is just a sampling of those areas and related questions:

1. The practice of management
a. Define “management” for me.
b. How would your previous superiors describe your management skills?
c. What is your style of management, and can you share an example of how well it has worked for you?

2. Leadership
a. Tell me about a policy you put in place that generated employee resistance.
b. Describe and give examples of your self-confidence.
c. How do you convince people to want to do what needs to be done?

3. Risk-taking
a. How do you assess risk?
b. Describe the circumstances where you had to make a decision before you had sufficient facts.

4. Results-oriented
a. How did you bring about your greatest achievement?
b. How are your previous employers better off as a result of your employment?

5. Delegation
a. Is delegation worth the risk? Explain with examples.
b. How do you manage a task delegated to a subordinate?

6. Judgment
a. What was the worst decision you made in the last year, and what was the outcome?

7. Ability/desire to learn
a. What periodicals do you currently read?
b. What did you learn from your previous superior?

8. Planning ability
a. Tell me about the best plan you prepared, how you implemented it and the results.
b. How do you decide what elements of a plan to delegate?

9. Ability to organize
a. Help me to understand how job descriptions help employees work better.
b. What data do you collect to measure progress in your area, and how do you use it?

The other areas can be identified by contacting the author:

John Featherstone, author of “Start Hiring Winners,” is a consultant to small business and a former five-year volunteer with SCORE, mentoring and training small-business owners and employees. As a division vice president/general manager for a privately held confectionery company, Featherstone managed a spectacular annual growth rate of 50% for seven consecutive years.

By Mike deVaux

If you are like most employers, you are wondering where the health reform roller coaster is going to take you and your company’s medical insurance plan next. You would also not be alone.

The question of, “What actions do I need to take as an employer to comply with health reform” is frequently asked, but the unfortunate reality is it is not very easy to answer. With 26 states in a lawsuit against the constitutionality of the Patient Protection and Affordable Care Act (PPACA), better known as health reform, that is to be heard by the Supreme Court this spring, the future of health reform remains uncertain.

If the Supreme Court rules the mandate unconstitutional, it doesn’t necessarily mean the entire health reform will be reversed. A change in the presidency and the Senate in 2012 also don’t guarantee complete repeal, with many of the reform measures already incorporated into our medical insurance plans remaining.

Regardless of which side of the debate you are on, the issue for many companies remains how to best deal with the changes that have already occurred and the changes to come. Most of the early aspects of the health reform were not favorable to lowering the cost of the coverage.

Components such as no policy maximum, dependent coverage to age 26, 100% coverage for preventative care and no pre-existing conditions for under age 19 dependents are all good features to have in a policy. The bottom line, however, is they add to the cost of the claims incurred by the carriers, which means health reform isn’t going to lower the cost of coverage for employers.

What’s next for health reform?

In 2012, the big item implemented was the requirement for employers to report the cost of employer sponsored health coverage—which only applies to employers who produce more than 250 W2s per year. (For information on this requirement, reference IRS Notice 2012-9.) In 2013, all employers will be required to report cost of health coverage on W2s.

The next big event in health reform will be the implementation of the exchanges. Without getting into too much detail, the exchange concept was created to provide a marketplace to make insurance more affordable and easier to purchase for small employers and individuals.

By 2014, every state is required to provide an exchange to allow the comparison of cost and different types of benefits for employers and individuals to purchase insurance. If your state chooses not to implement an exchange, then you will have access to a multi-state exchange.

Like many aspects of health reform, the exact rules and regulations haven’t been finalized. With state budgets being tight, not many states are proactively spending the money to develop exchanges and the likelihood of the exchanges being ready for a roll out in 2014 is highly questionable.

One thing is for certain: If the exchanges do come about, the only way to claim the Health Insurance Premium Tax Credit for your employees that qualify will be through insurance purchased through the exchanges.

What to do as an employer?

You can’t control what is going to happen with health reform. One thing you can do is not worry about it until the next aspect of health reform is implemented, more than likely sometime after the Supreme Court ruling and the elections of 2012.

If your company is on a fully insured plan, your insurance company will help you keep your plan in compliance.

As far as saving money goes, health reform is not going to bend the medical insurance cost curve for you and costs will continue to go up as they have in the past. The national medical trend rate (i.e., medical inflation rate) is 10% to 11% and will most likely continue to be a starting point for your renewal rates.

Prior claims and demographic changes will be factored around the medical trend factor to determine your renewal rates.

How to control costs

Now that you know health reform isn’t going to lower the cost of health insurance, what can you do to control costs?

To contain and reduce costs, you need to change the way you look at health insurance. There are some businesses that have had low claims years but still received double digit renewals, but why?  There was components of their health plans they were paying too much for.

Bottom line: your company is most likely overpaying for first-dollar insurance company benefits that most of your employees never use.

Statistics show that:

•88% of your employees will spend less than $500 per year on health care;

•93% of your employees will spend less than $1,000 per year on health care; and

•Tower Perrins studies show that 80% of your claims will come from 20% of your enrolled.

To cut unnecessary cost, remove overpriced components of your health plan that very few employees actually use. You can also stop pre-paying insurance companies to administer benefits that are not cost-effective.

If providing first-dollar coverage is essential to your business and employees, then incorporate a Health Reimbursement Arrangement (HRA) and a high-deductible strategy to have the money available for employee use, but only send to the providers when services are utilized. If services are not utilized then the money stays with the company and not the insurance company.

Finding a solution

Health insurance is never going to be free and health reform certainly didn’t provide a solution to make it less expensive. The health insurance market will continue to be a very fluid environment.

The only solution to managing medical insurance costs is a proactive approach on the part of the employer working with their broker to build a cost-effective and comprehensive medical insurance program that provides protection for your employees and their families at the best possible cost.

Mike deVaux is a Registered Health Underwriter and Managing Partner of Keystone Benefit Group, an employee benefits consulting firm in Jacksonville. Keystone Benefit Group serves clients throughout the U.S. helping them develop, implement and manage employee benefit solutions. He can be reached at mdevaux@kbgllc.com, 904-464-0888 or by visiting www.YourInsuranceKeystone.com.

Small businesses near and far are thankful that technology is on their side, especially when it comes to financing. Tremendous strides have been made in the banking world in the last few years that makes getting a loan easier than before, but many small businesses are finding that there is none easier than online.

Online financing?

Touting themselves as something of a Match.com for lenders and borrowers, BoeFly (www.boefly.com) is an online loan exchange that efficiently connects small business owners with more than 2,000 business lenders.

“We connect borrowers and lenders by helping borrowers build a better loan package and helping lenders find those borrowers,” says David A. Nayor, co-president and chief operating officer for BoeFly. “Being former lenders ourselves, we noticed inefficiencies in the marketplace—mainly where borrowers were having trouble finding lenders.

“We took a step back and figured there’s got to be a better way,” Nayor continues. “Looking at other industries that use the Internet to connect parties more efficiently, such as eHarmony, Match.com, Cars.com, or eBay, we took that concept and applied it to small business lending with BoeFly.”

How it works

BoeFly is a loan-packaging service with software that helps the borrower gain a thorough understanding of what goes into a small business loan request and how to properly package it. Within that process, the borrower receives feedback from the exchange explaining where the strengths and weaknesses are in the deal and allows adjustments to be made as to what lenders want to see based on the marketplace of lender preferences.

“It’s not incredibly complicated, but it does take work to get a loan—no matter the size,” says Nayor. “There is a certain amount of work that lenders want to see in the loan request and we empower borrowers to be prepared before they connect with lenders. It also helps lenders find deals they wouldn’t have ever been privy to otherwise. Really, the success comes down to us matching borrowers with lenders, and ensuring it’s the right lender.”

Kevin Ellis, vice president of Small Business Lending at Atlantic Coast Bank, is one such lender that uses BoeFly to make connections. “With traditional methods, someone looking for lending would have to send their information, documents, and loan package to me. Then I would have to sort through it and ask for documents that may be missing,” says Ellis.

“With BoeFly, there is very little to sort through as everything is right in front of you to make an informed decision—the business plan, tax returns, estimates for build out costs and equipment costs, data on the franchise and the industry, resumes… the whole spectrum of things we would ask for, which sometimes when dealing with a busy borrower can take a long time to obtain,” says Ellis.

Making a deal

One such informed decision Ellis made after a BoeFly alert came across his desk was with Nick Borst, a Jet’s Pizza franchisee in Destin. Borst, who was looking to get funding to open this franchise, says he saved the online financing option for last not thinking he would find anyone, “but within 24 hours we had Atlantic Coast Bank interested.”

“It is probably the best example of the strength of BoeFly’s platform in matching me with the borrower,” says Ellis. “He’s in Destin and I’m in Jacksonville, and we were still able to make this deal happen in a matter of hours.”

“This project would have been up and running three months earlier if we would’ve started with BoeFly,” says Borst. “We tried several traditional avenues, and while they thought we would be great people to run it, they didn’t have the ability to fund us and we lost a lot of time with their processes. With BoeFly, you know the interest you receive from a lender is from somebody with a serious interest.”

“There is a lot of information you have to put in to the system, but the more you put in the better your chances are and the nice thing is you only have to put it in once,” continues Borst. “In our case, we had a very in-depth, several hundred page—probably too much—business plan and BoeFly helped us determine what was pertinent information and actually needed for the loan. They outlined what they and lenders look for which allowed us put the right information in the right spots.”

Ease of use

“The word that always comes back to us is that it is efficient,” says Nayor. “Efficient from a time perspective as the borrower only has to build a loan package once and efficient from a cost perspective as borrowers and lenders only pay a very small posting or subscription fee to use the platform.  There are no large commissions involved as BoeFly did not want to drive up the cost of the transaction or this interest rate that the borrower ultimately pays. This allows lenders to get more aggressive on their pricing and terms and it allows borrowers to find the best deal for them.”

Ellis adds, “It’s a different financial world these days. This is a great way that allows borrowers, lenders, franchisors—really everyone—to navigate this new environment and reach places and surrounding areas that wouldn’t have been available to them otherwise. It allows me to be mobile without being mobile.”

By David P. Grigaltchik

So, you’ve got a plan, a product and a partner, and you’re ready to launch your very own business and take the world markets by storm. In this article, we will explore the different legal issues that prudent business owners should address before going forward with any business venture. Essential to the operation of any successful business is the effective management of the three P’s of business: patrons, partners, and property.

Patrons

The success or failure of your business depends on one thing: your patrons, customers and clients. Having a large pool of clients is always a good thing, but, as with most things in life, quality counts for more than quantity.

Business owners learn early and are reminded frequently that customers may be their best friends or their worst enemies. Billing disputes and frivolous lawsuits regularly cost American businesses millions of dollars.

Since business owners typically lack the ability to pick and choose their patrons, they must learn to protect themselves through other means. Liability or malpractice insurance is something that business owners routinely pay for and hope to never have to use. Liability waivers may allow business owners to resolve adverse litigation quickly or to prevent it altogether, thereby avoiding having to pay larger insurance premiums.

By using waivers, business owners may guarantee certain rights to the patrons of their businesses, accepting liability in specific cases for the patrons’ financial or physical security, but limiting liability in other ways. By signing waivers, business patrons are essentially signing away their rights, and many such rights must be considered when drafting waivers, including rights to privacy.

Since courts are typically hesitant to limit the rights of individuals, waivers containing specific and clear language will have a higher chance of enforcement than waivers containing general and vague language. Waivers are not just for business owners whose businesses involve routine operations that have a high risk of causing financial or physical injury to clients.

As a rule of thumb, if you pay a liability or malpractice insurance premium, you should probably be using waivers. Waivers will not protect business owners who cause harm to their clients wantonly or take unreasonable risks. There is no reason, however, for business owners to live in fear of being held liable for the negligent actions of their employees or for damages caused by unforeseeable environmental factors.

Partners

Your business partner is your wing man. More than just a friend, your business partner is someone you rely on to keep your dreams of operating a successful business alive.

The process of starting a business is exceedingly simple in Florida. In most cases, in order to form a limited liability company, future business owners must simply file the Articles of Organization and pay a small fee. The Articles contain tiny snippets of information concerning your business; typically, the names of the officers and the registered agent, and the address of the company are listed, but little else.

This means that, at the outset, nothing exists delineating the duties, obligations, rights, privileges, or profit allocations among business partners. In other words, at the outset, your relationship with your business partner and, by extension, your business is held together with nothing more than a gentleman’s word.

With a little foresight, this precarious situation may be remedied by way of an operating agreement for your limited liability company. For a limited liability company consisting of two or more business partners, an operating agreement is an absolute must. Not only do operating agreements contain such essential information as the initial capital contributions of each business partner or member, but also provide for the allocation of profits, the timelines of disbursements, and the assignment of other duties.

Operating agreements may contain information specifying the employment of certain professionals, such as lawyers and accountants, and may designate members as specifically responsible for handling tax issues or other specific duties for the benefit of the company.

Consider that most people get married without ever intending to divorce, and yet divorce happens all the time. Similarly, even if the relationship between business partners is stellar, prudent business owners must have the vision and foresight to consider the possibilities of disagreement and dissatisfaction.

Property

Your interest in your business is a property interest. Like most property interests, it is freely alienable, which means that you are free to dispose of it as you like. It may be sold. It may be given away. It may be inherited upon your death. What’s true for you is also true for your business partner.

What happens to your business if your business partner no longer wants to be involved? What happens to your business if your business partner, god forbid, dies an untimely death? The answer is that you may end up having to deal with someone you never wanted to deal with, a business partner you don’t know, like or trust. In many situations, this will effectively bring an end to your business.

Once more, with a little foresight, you may address these issues before they arise by executing a buy-sell agreement with your partners. Buy-sell agreements govern the transfer of a business interest upon a business partner’s unwillingness or inability to continue with the relationship.

Typically, buy-sell agreements grant to the remaining partners the first option to purchase the withdrawing partner’s interest. Such agreements also contain provisions addressing the purchase of a deceased partner’s interest from the estate of the deceased partner. Buy-sell agreements may be tailored in many ways, in some cases making the purchase of the withdrawing partner’s share mandatory.

Regardless of how such agreements are tailored, they allow business owners to protect their interest in the business by giving them the option to continue to operate the business on their own terms following the departure of a business partner.

Gain foresight

In order to be successful in managing the three P’s of business, patrons, partners and property, business owners must have foresight and exercise such foresight by timely executing a series of available legal agreements.

In dealing with patrons, customers or clients, business owners should make use of waivers to limit their liability, thereby protecting themselves from frivolous lawsuits. In dealing with business partners, business owners should make use of operating agreements to ensure that all the rights and duties are clearly delineated at the beginning. In order to manage their property interest in their business, business owners should make use of buy-sell agreements to enable them to continue operating their business on their terms.

Many surprises will greet you in during all phases of business operation, from formation, through expansion, and into dissolution, but with a little foresight, you will be able to nip some of these in the bud.

David P. Grigaltchik is a business law attorney practicing law with his own law firm, David P. Grigaltchik, P.A. His office is located at: 6144 Gazebo Park Place South, Suite 215, Jacksonville, FL 32257. He may be reached at: 904-738-8398 or info@griglaw.com.

By Greg Crabtree

Your newest hire has worked for their first 30 days and while looking back at their great resume and 15 years of experience, all you can think is, “Does he really have 15 years of experience or just one year of experience 15 times?”

Sometimes hiring someone with experience means they are competent in only one area instead of many. Since they also had “years” of experience, they demanded a premium pay that bore a poor relationship to profitability. This type of experience is why you to have to make “you have to love training” one of your core values.

Instead of just passing on the cost to your clients by paying too much for labor, solve the problem a different way. By growing your own talent, you would be able to keep access to your services more affordable and fulfill your company’s mission.

Taking the steps

The first step is to identify which core areas you need your employees to be competent in. For instance, a CPA firm may need it to be personal tax, business tax, accounting system implementation, financial statement preparation and forecast modeling.

The next step is to identify the personality characteristics you need and screen your candidates for those characteristics. If you need an outgoing personality for your customer service, be sure to hire someone with a friendly disposition. If you need someone who is extremely organized, ask questions that would provide you some insight as to how they organize.

Some companies offer a test (for a fee) you can use such as Caliper (www.calipercorp.com). After your candidate takes the test, you get an email with basic results within 24 hours, a call from their consultant to discuss the results and a written report with even greater detail findings within three days.

Once you hire your employee, schedule the work for them to stretch but not break them. One way to achieve this is to employ a 70/20/10 training philosophy, which is 10% classroom, 20% one-on-one mentoring and 70% “throw you off the deep end of the pool to see what you can do.”

Until you throw them off the deep end of the pool, you won’t know what they really can do! You are not going to let them “drown,” but this technique lets you know what they are capable of and what limits you can expect, and then you can train them for how you want things done.

Making improvements

When you add an expensive person with narrow experience, you may get some growth but not much in the way of profit since he or she cannot be used for more than one service offering and may be resistant to expanding his or her skill set. When that employee leaves, either by your choice or theirs, the crazy cycle starts all over again.

When you hire an employee based on personality characteristics, however, you get an employee that will be with you for a while and more than likely become one of your top performers. Going from turning over two staff members a year to turning over two staff members in, say, seven years is a much better statistic. There will always be plenty of new business opportunities; your only bottleneck will be how quickly you can add the right people.

Hire for attitude, train for skills—it really works!

Greg Crabtree has worked in the financial industry for more than 30 years. He founded Crabtree, Rowe & Berger, PC, a CPA firm dedicated to helping entrepreneurs build the economic engine of their business. Crabtree leads the business consulting team, helping clients align their financial goals with their profit model and their core business values. He is the author of “Simple Numbers, Straight Talk, Big Profits!” He can be reached through www.seeingbeyondnumbers.com.